The president of the Bundesbank, ?irritated? with the discussion of Eurobonds

Bundesbank president,? irritated ?with the discussion of eurobonds

Photo: REUTERS

PARIS, May 25. (IRIN) ?

Jens Weidmann, president of the Bundesbank and a member of the Governing Council of the European Central Bank (ECB), said he was ?slightly irritated? with the current debate about Eurobonds, as these instruments do not solve the crisis and make sense only as the culmination of a long process

?It irritates me a bit of debate (?) Believe that Eurobonds will resolve the current crisis is an illusion,? says German banker in an interview with the newspaper ?Le Monde?, which notes that ?one does not trust anyone your credit card if you will not be able to control his spending. ?

In this sense, Weidmann notes that Eurobonds are meaningful only as the culmination of a long process that requires, among other things, changes in the constitutions of several countries and treaty reforms to achieve greater budgetary integration.

?debt pooling is not a successful tool to stimulate growth and cause both legal and economic problems. do not think we could solve the debt crisis with more debt outside the regular budget, growth requires structural reforms , ?the hawk of the ECB.

In fact, the president of the Bundesbank is reluctant to support the formulation of so-called ?project bonds?, noting that it would be a new answer ?Keynesian? would not respond to the problems of debt and lack of competitiveness of several European economies in trouble.

?Every month there are great ideas to address the crisis before disappearing next month. now is the bond projects in addition to the funding problems ? I?m not sure whether the lack of infrastructure which prevents the growth in these countries. I have not seen any serious discussion about it, ?he says.

Thus, Weidmann emphasized that besides the lack of competitiveness in some countries, the main problem in the euro area remains the debt of the states, so we should not embark on a new round of spending.

?Countries must first restore market confidence, credibility. should implement promised reforms and delaying the time,? he adds.

In this sense, the banker recalls, ?that is pro-growth is like saying that it supports world peace,? and that the question should be how to achieve sustainable growth, which represents a pillar of the European programs of adjustment and structural reforms pliacar passes. ?Deviating from the decision is dangerous,? he adds.

Moreover, the Bundesbank president and one of the two representatives of Germany in the ECB council, warns that the ?guardian of the euro? has reached the limits of its mandate, particularly with the unconventional measures taken to have fired the central bank balance sheet, creating risks for taxpayers, especially Germany and France.

?Governments must assume their responsibilities, not outsource monetary policy,? Weidmann said, stressing the need not to bring monetary policy to fiscal policy, as it would damage the credibility of the ECB, in addition to ?financing State money is, for good reasons, prohibited by the treaty. ?

Thus, the president of the Bundesbank argued that a central banker ?should have its own compass? as financial markets ?change their minds every two weeks.?

?One day I always want more, the other day complaining about the consequences of what they got,? he says when asked by the auctions of long-term liquidity the ECB (LTRO).

?These loans have helped to save time, but do not solve the structural causes of the crisis. as morphine, relieve pain, but do not cure the disease, may even have side effects such as delay the adjustment in the sector banking, ?he concludes.

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Sources:

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